In large and even small organizations a full-time risk manager develops and coordinates the risk management functions. Often in small businesses the risk management function rests with the business owner or executive leader and has not defined an individual to be a risk manager in particular. This role can be shared among line managers as well, while the controller or finance manager is often responsible for actually buying Insurance.

The Risk Manager’s Role Include the Following:

  • Identifying loss exposures
  • Preventing loss
  • Reducing Loss
  • Financing Loss
  • Educating other company managers on risk control
  • Acting as a resource to the organization

Risk manager’s understand insurance products, specific coverage’s as well as recognize how insurance products can effectively reduce the cost of risk for their organization. They can also know the utility of specialized Insurance Professionals and Insurance Brokers that can in assisting with the risk management process. Decisions made by risk management professionals should be supported by the companies senior management because they would impact the organization holistically.

Such decisions as changing insurance companies or brokers or potentially accepting changes in the policies renewal cost generally require senior management approval. However, the Risk Manager will have significant influence over this decision as well. The Broker should also be aware of where the authority to make risk management decisions ultimately lies.

In small businesses, there is usually an individual who will perform some if not all of the risk management functions but would not be officially identified as the organization’s Risk Manager. At times this individual may be the office manager who is responsible for buying supplies and the companies Insurance policy while also taking sales orders, dealing with complains and potentially managing staff as well.

Risk Management Certification

Experienced Insurance Brokers will find it gratifying in dealing with professionally educated Risk Managers that happen to have the CRM Designation, primarily due to trained Risk Managers having a solid understanding of the risk exposures facing the company and the importance of Insurance in Risk Management strategy development.

Having a Risk Manager within an organization working hand in hand with the chosen Insurance Broker leads to significantly improved Risk Management results as the Manager will make significant demands on the Broker to contribute to the risk management process and produce results. Brokers will thus work directly with Insurance Underwriters to ensure a proper fit between the Insurance Coverage’s and the Risks that the business could potentially be exposed to in the future.

Knowing the Risk Management process gives Insurance Brokers and Risk Managers insight into the businesses special needs and provides them with the required tools and skills to develop effective plans that can mitigate future risks.